You better hope it goes through. The company has been struggling and without the merger would likely have to cut the distribution, similar to NRP. Rsult of that would mean a price much lower than RGP is paying.
It's a trust so there is a tax booklet from which you need to do the calculations. The booklet is available on the trust website
good summary, other than a few quibbles - for example WHX liquidates after a fixed amount of production rather than on a fixed timeframe.
In the first years you hold it, cost depletion is very significant and may even be more than the royalty income leading to a net deduction that flows through to the 1040. Over the years as your adjusted basis gets lower the deduction becomes smaller until you have deducted your entire investment. Even then though you can still go on claiming percentage depletion. So in fact the tax handling is pretty advantageous. If you hold long enough you can deduct more than the entire cost of your investment as a deduction against ordinary income. Can't get much better than than.
Suggestions, yes: set aside a few hours and read the tax booklet.
It's very wordy but in practise it is quite simple when you get your mind around it.
Maybe easiest is to look at their examples.
There are a few trusts that use this structure (WHZ,WHX,MVO,VOC) and the first year I had to do taxes on one it took me a while to get my head around. I had to read the booklet a couple of times. But after that it is a piece of cake and assuming you just bought one or a few lots and held them (rather than trading) the calculations are pretty simple.
It makes sense if you think about it. Think of it as though when you sell you have just paid tax on the distributions and CG on your price appreciation (that's just a rough approximation). For this to work then the loss has to reduce your basis so that you don't end up getting a deduction twice. Maybe the opposite case of positive income is easier to understand. Let's say you have a positive number in box 1. You pay tax on that this year. That raises your basis so that when you sell you end up paying taxes on the distributions you received and the increase in basis serves to reverse the tax that you already paid on the box 1 amount. The same applies to negative (loss) numbers but in reverse. Think about it and it makes perfect sense.
No, loss becomes a deduction however it can only offset positive income for the same MLP until you sell. Once you sell it gets unlocked as a deduction. And that is why the basis has to change too, otherwise you'd effectively get the deduction twice.
" I thought only distributions lowered the capital account."
Nope, distributions lower your basis, however positive items in most fo boxes 1-11 increase it and negative numbers decrease it.
Reason: those are taxable numbers so if it didn't adjust your basis, then it would mean that you'd get taxed on positive numbers twice and receive a deduction for negative numbers twice.
You may have a problem. I've warned you before about holding MLPs in the IRA.
As for 13J and 20T offsetting, well, I believe different MLPs report UBTI in different ways so you will have to read the full K-1 with the instructions to see about that for MEMP.
And the other question is whether you can offset your positive 20V number against negative 20V numbers on other K-1s from other MLPs. That is also a subject on which there has been debate, however the consensus seems to be that you cannot use negatives to offset positives.
Of course, you could just ignore it. Assuming you are a small investor you are not likely to get caught.
The entire pharmaceutical and medical industry is highly dependent on oil.
Hypocrite. Do you use modern medicine?
3. You have to use the sales schedule along with your purchase price.
The adjustments to basis adjusts your purchase price. Negative adjustment means lower price, positive means higher basis. Also you enter the ordinary gain amount in the disposition screen in Turbotax and that feeds into form 4797.
The AMT adjustment has always been a little puzzling to me.
don't know what you compared but ECT will never drill another well so its production will decline steadily.
NDRO and ROYT can keep drilling indefinitely.